The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan

Recently, many companies have recognized the concepts of green supply chain management or supply chain environmental management. However, relatively little research attention has been devoted to the consideration of relations between greening the supply chain, green innovation, environmental performance and competitive advantage. Hence, this paper aims to bridge this gap by providing empirical evidence to encourage companies to implement green supply chain and green innovation in order to improve their environmental performance, and to enhance their competitive advantage in the global market. A model is constructed to link the aforementioned constructs. Data were collected through a questionnaire-based survey across 124 companies from eight industry sectors in Taiwan. The data are analyzed using Structural Equation Modeling and the results from the final measurement model are used to evaluate the structural model that verifies the significance of the proposed relationships. A prominent result of this study is that greening the supplier through green innovation contributes significant benefits to the environmental performance and competitive advantage of the firm.

► Influence of greening the supplier and green innovation on firms’ performance is studied.
► Firms’ performance is measured by competitive advantage and their environmental performance.
► A questionnaire survey has been conducted in Taiwan; Structural Equation Modeling is used to analyze collected data.
► Deployment of the aforementioned practices contributes significant benefits to firms’ performance.
► Indirect effect between green innovation and greening the supplier leads to better competitive advantage.